Peter1469
07-03-2016, 07:28 AM
Obamacare insurers are looking for a taxpayer bailout (http://www.thefiscaltimes.com/Columns/2016/06/30/Obamacare-Insurers-Are-Looking-Taxpayer-Bailout)
Obamacare was a big redistribution of wealth scheme. First it takes the health care dollars of millions of young people who otherwise wouldn't bother with insurance and gives it to the poor and old. Second, it takes profits from the successful insurers and gives some to the less successful insurers. Now, the insurance companies think they need more profits, so they are asking Congress for a bail out. Congress will take taxpayer money to do it.
Who thinks that Congress will say no?
Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration. As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits.
Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled -- not through superior products and services, but through lawsuits.
I will remind you that insurers did not cheerlead the creation of Obamacare in the beginning. They told the government that their plan was nuts and wanted nothing to do with it.
After time, they were at the table. What happened? Back then I provided my opinion on what happened:
"Government to insurers: Your business model is coming to an end. Help craft Obamacare and get a few years to grab as many profits an possible then get ready for universal health care. Or don't come to the table and your days of profits are done."
Earlier this month (http://www.modernhealthcare.com/article/20160602/NEWS/160609973), Blue Cross Blue Shield of North Carolina joined a growing list of insurers suing the Department of Health and Human Services for more subsidies from the risk-corridor program. Congress set up the program to indemnify insurers who took losses in the first three years of Obamacare with funds generated from taxes on “excess profits” from some insurers. The point of the program was to allow insurers to use the first few years to grasp the utilization cycle and to scale premiums accordingly.
As with most of the ACA’s plans, this soon went awry. Utilization rates went off the charts, in large part because younger and healthier consumers balked at buying comprehensive coverage with deductibles so high as to guarantee that they would see no benefit from them. The predicted large windfall from “excess profit” taxes never materialized, but the losses requiring indemnification went far beyond expectations.
In response, HHS started shifting funds appropriated by Congress to the risk-corridor program, which would have resulted in an almost-unlimited bailout of the insurers. Senator Marco Rubio led a fight in Congress to bar use of any appropriated funds for risk-corridor subsidies, which the White House was forced to accept as part of a budget deal. As a result, HHS can only divvy up the revenues from taxes received through the ACA, and that leaves insurers holding the bag.
Obamacare was a big redistribution of wealth scheme. First it takes the health care dollars of millions of young people who otherwise wouldn't bother with insurance and gives it to the poor and old. Second, it takes profits from the successful insurers and gives some to the less successful insurers. Now, the insurance companies think they need more profits, so they are asking Congress for a bail out. Congress will take taxpayer money to do it.
Who thinks that Congress will say no?
Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration. As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits.
Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled -- not through superior products and services, but through lawsuits.
I will remind you that insurers did not cheerlead the creation of Obamacare in the beginning. They told the government that their plan was nuts and wanted nothing to do with it.
After time, they were at the table. What happened? Back then I provided my opinion on what happened:
"Government to insurers: Your business model is coming to an end. Help craft Obamacare and get a few years to grab as many profits an possible then get ready for universal health care. Or don't come to the table and your days of profits are done."
Earlier this month (http://www.modernhealthcare.com/article/20160602/NEWS/160609973), Blue Cross Blue Shield of North Carolina joined a growing list of insurers suing the Department of Health and Human Services for more subsidies from the risk-corridor program. Congress set up the program to indemnify insurers who took losses in the first three years of Obamacare with funds generated from taxes on “excess profits” from some insurers. The point of the program was to allow insurers to use the first few years to grasp the utilization cycle and to scale premiums accordingly.
As with most of the ACA’s plans, this soon went awry. Utilization rates went off the charts, in large part because younger and healthier consumers balked at buying comprehensive coverage with deductibles so high as to guarantee that they would see no benefit from them. The predicted large windfall from “excess profit” taxes never materialized, but the losses requiring indemnification went far beyond expectations.
In response, HHS started shifting funds appropriated by Congress to the risk-corridor program, which would have resulted in an almost-unlimited bailout of the insurers. Senator Marco Rubio led a fight in Congress to bar use of any appropriated funds for risk-corridor subsidies, which the White House was forced to accept as part of a budget deal. As a result, HHS can only divvy up the revenues from taxes received through the ACA, and that leaves insurers holding the bag.